Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, “D” BENCH, MUMBAI
Before: SHRI ABY T. VARKEY, JM & SHRI GAGAN GOYAL, AM
O R D E R PER ABY T. VARKEY, JM: These appeals preferred by the revenue are against the orders of the Ld. CIT(A)-49, Mumbai, both dated 08.04.2021, for A.Y. 2015-16 & A.Y. 2016-17.
We first take up the appeal in for A.Y. 2015-16. Ground no. 1 of the Revenue’s appeal is against the action of the Ld. CIT(A) deleting the addition made by way of unexplained cash credit u/s 68 of the Income Tax Act, 1961 (hereinafter “the Act”) on account of the corpus donation received by the assessee amounting to Rs.12,37,00,000/-.
ITA Nos. 1295 & 1304/Mum/2021 A.Ys.2016-17 & 2015-16 D. Y. Patil Sports Academy 3. The brief facts of the case as noted is that, the assessee trust has been incorporated with the main object of promoting, motivating, developing sports, imparting sports knowledge and fitness awareness by establishing coaching / training classes, participating in and conducting tournaments in India and abroad. For the relevant A.Y. 2015-16, the assessee had filed return of income on 29.01.2016 declaring total income of Rs. NIL. Later, search u/s 132 of the Act was conducted upon M/s. D. Y. Patil Group on 27.07.2016. Upon verification of the documents and material seized in the course of search, the AO recorded a satisfaction note on 12.09.2018 that, these materials and statements recorded in the course of search u/s 132(4) of the Act revealed that the students and/or their parents who got admission in D.Y. Patil Medical College/University paid capitation fees in the guise of corpus donations to the assessee. In this regard, the AO referred to the statements of Shri Pratap Patil & Shri Tukaram Patil who were the employees of DY Patil University examined under oath u/s 132(4) of the Act. Referring to Annexure No. A-27 found and seized from the premises of DY Patil Group, the AO recorded his satisfaction that, the assessee trust was being used as the entity for keeping/parking the capitation fees received by D.Y. Patil University and related entities for admission to the respective courses in the guise of donations. In view of the satisfaction note so recorded, the AO issued notice u/s 153C of the Act seeking to reassess the income of the assessee for the relevant AY 2015-16. In the course of assessment, the AO noted that there were few instances where the corpus & 1304/Mum/2021 A.Ys.2016-17 & 2015-16 D. Y. Patil Sports Academy donations received by the assessee trust coincided with the admissions of the students in D.Y. Patil University. The relevant instances noted by the AO were as follows:
S. Name of Admission of Amount Reference to seized Year No the parent the ward of DY of material giving Patil Group, donation donation Navi Mumbai (Rs.) & Year 1 Dr. R M 2014 Dr. Neha R. 30,00,000 1. FILE NAME : HP Deshmukh, Pavilion\pen drive\New Deshmukh folder (4)/ADM Pedo - 2015 Account 2. FILE NAME : HP Pavilion\pen drive\New folder(4)/Unmesh.xls/S heet 1 3. Annexure A-27, Pages 14-18 2. Mr. 2014 FRESTON 50,00,000 1. FILE NAME : HP Bernard Pavilion\pen Drive\ SIRUR - Francis New folder (4)/ADM Sirur Account MBBS 2014 2. FILE NAME : HP Pavilion\pen drive\New folder(4)/Unmesh.xls/S heet 1 3. Annexure A-27, Pages 28-34 3. Mr. Anant 2015 MBBS 2015 40,00,000 1. File Name : HP Bambawal probook\PEN DRIVE\ e New folder (4)/Unmesh 2. Annexure A-27, Pages 102-104 & 1304/Mum/2021 A.Ys.2016-17 & 2015-16 D. Y. Patil Sports Academy 4. Mr. 2015 SHREEYASH 30,00,000 1. File Name : HP Vitobha VITHOBA probook\PEN DRIVE\ Hanumant PATIL – New folder (4)/Unmesh Patil MBBS 2015 2. Annexure A-27, Pages 190-193, 208- 210
The AO therefore inferred that these donations are linked with the admissions of these students in DY Patil University and thus doubted the genuineness of the same. The AO also referred to a statement of Shri Ajay Rai who had admitted to have made a payment in October 2012, in lieu of film shooting in the premises of the assessee, in the guise of donation to DY Patil Hospital & Research Centre. The AO, thereafter, extensively reproduced the statement of Shri Unmesh Khanvilkar recorded u/s 132(4) of the Act wherein he had admitted that D.Y. Patil University was receiving cash by way of capitation fees. Relying on the aforesaid, the AO concluded that the assessee is also found to be involved in activities not in accordance with its objectives, and therefore, he denied the benefit of exemption claimed u/s 11 of the Act. The AO further noted that the corpus donations received by the assessee was linked to admissions of wards of the parents in D.Y. Patil University and upon examining the donors on test check basis, it was revealed that the donations were given without any specific directions. The AO thus held that these corpus donations were not genuine and accordingly assessed the entire corpus donations of Rs.12,37,00,000/- received during the year as & 1304/Mum/2021 A.Ys.2016-17 & 2015-16 D. Y. Patil Sports Academy unexplained cash credit u/s 68 of the Act. Aggrieved by the order of the AO, the assessee preferred an appeal before the Ld. CIT(A) who was pleased to delete the impugned addition and allow the exemption claimed u/s 11 of the Act. Being aggrieved by this order, the Revenue is now in appeal before us.
We have heard both the parties and perused the records. It is noted from the findings of the AO, that according to him, the assessee trust was used as a conduit for receiving money in form of donations in lieu of capitation fees received for admissions into the medical college and other affiliated institutions of D.Y. Patil University. The AO had thus assessed the entire corpus donation of Rs.12.37 crores as unexplained cash credit u/s 68 of the Act. The case of the AO hinges on the details of the donations received by the assessee, as seized in the course of search, from which it was gathered that the name of four candidates admitted into D.Y. Patil University correlated with the four donors who had made donations to the assessee Trust (details already reproduced earlier). According to the AO, if one reads the statements of Shri Pratap Patil & Shri Tukaram Patil, who are employees of the D.Y. Patil University, along with the details of these donations, it clearly shows that, these donations were given to the assessee in lieu of capitation fees. 6. Before proceeding to examine the details of the four instances of donations, which according to AO, correlated with admissions of the wards of the donors, let us first examine the statements of the & 1304/Mum/2021 A.Ys.2016-17 & 2015-16 D. Y. Patil Sports Academy employees of the DY Patil University which formed the premise of the satisfaction note recorded u/s 153C of the Act and also basis of the impugned addition. The first statement referred to by the AO was that of Shri Pratap Patil. The relevant portion of his statement is as follows:
“Q.43: I am showing you print out tab "MEdical" of ms- excel file of PT 1213 found from 8 GB Kingston pendrive found at premises (As per page no. 26 of Annexure-1). Kindly explain the details of data. Also explain how it is accounted in the books of the accounts of D.Y Patil Medical College. Further confirm that whether same has been entered by you. Ans: Yes I confirm that the data in the abovementioned file is entered by me and same is not accounted in the books of the accounts. "INCOME" refers to the collection from UG and PG medical student by me for financial 2012. Total amount collected as capitation/donation was 84 lakhs. The Ref column refers to the references. MNS here represents reference from Maharashtra Nav Nirman Sena which is a political party. Under Expense column VSIR represents Vijay Patil (President, D.Y. Patil University, Nerul) and DYPSA represents cash payments made to DY Patil Sports Association.”
It is noted that, in the above answer, Shri Pratap Patil has referred to the cash receipts from medical students received in 2012 and not the relevant FY 2014-15. Further, there is no reference or mention of using the assessee Trust as a conduit for receiving capitation fees in form of donations. Moreover, the details of & 1304/Mum/2021 A.Ys.2016-17 & 2015-16 D. Y. Patil Sports Academy donations found in Annexure No. A-27 and the donation letters found and seized in the course of search, contains the details of donations received in cheque by the assessee and does not mention or suggest receipt of any donations by the assessee in cash. We therefore agree with the Ld. CIT(A)’s findings that the statement of Shri Pratap Patil with reference to the details of donations found in the pen-drive has no relevance qua the assessment of income of the assessee Trust.
Now coming to the statement of Shri Tukaram Patil which also finds mention in the satisfaction note of the AO, it is noted that this person is the employee of DY Patil University and he had stated that he managed cash expenses of the assessee as well. The relevant portion of his statement is as under:
“Q.
Please let us know who is handling the cash matters. Does Dr. Vijay D Patil, who is the president, handle the same himself? Please elaborate. Ans: Sir, Cash matters relating to D.Y. Patil Sports Academy, D.Y. Patil College of Ayurveda is being handled by myself. Cash matters of Medical college and Dental handled by the Pratap Patil (Accountant) and Unmesh Khanvilkar (Admission in-charge) and Smt. Shivani Vijay Patil, Who is the head of admission cell. Cash matters of Engineering College are being handled by Sunil Gaikwad, Registrar of Engineering College. Cash matters of Architecture College are being handled by D.D. Kolte, Registrar of Architecture College.” & 1304/Mum/2021 A.Ys.2016-17 & 2015-16 D. Y. Patil Sports Academy 9. Reading of the above shows that the statement of Shri Tukaram Patil was general in nature and he has not made any specific reference to the wrong doing and has not given details of purported cash managed on behalf of the assessee Trust. There is also no mention in his statement, whether the cash purportedly being handled by him and which he is referring to, pertains to cash maintained in the regular books of accounts or outside the regular books of accounts. It is further noted that nowhere has he mentioned that the corpus donations received by the assessee was not genuine or was received in lieu of capitation fees charged by DY Patil University from the students. We thus find that even this statement does not support the case of AO and as such serve any useful purpose for the Revenue.
The Revenue had also relied upon the statement of Shri Unmesh Khanvilkar which was extracted in the impugned order to justify the addition so made u/s 68 of the Act. The relevant portions of his statement are as follows:
“Q.26 Who looks after the admission procedures of DY Patil group of institutions, especially courses like Medical, Dental, BAMS and Physiotherapy etc.? Ans. Sir, I look after the entire admission procedures of DY Patil group of institutions in courses like Medical & Dental and to a lesser extent in BAMS and Physiotherapy which is also looked after by Pratap Patil and D.D. Kolte. During the last two years I have been doing the admission work regularly. Prior to that, I was involved in the admission process on and off and on a small scale. & 1304/Mum/2021 A.Ys.2016-17 & 2015-16 D. Y. Patil Sports Academy Q.27. Please state on whose directions you receive capitation fees in the form of cash from various students/parents/other persons on behalf of students during admission procedures of the various courses of DY Patil Group of institutions?
Ans. Sir the cash is received on the direction of Shri Vijay Patil, who is the president of the DY Patil University. I receive cash from parents of students for granting admissions in various streams of Medical, Dental, BAMS, Physiotherapy courses of DY Patil Group of institutions.
Q.28. Who decides how much cash is to be received from which student for which course in the D.Y. Patil group of institutions? Who negotiates the same with the parents/guardians/other persons on behalf of the students?
Ans. Shri Vijay Patil gives us a range of cash to be accepted from students in each course of the DY Patil group of institutions for every year. When the parents/guardians/other persons on behalf of the students approach us for seats, then we ask them for the amount of cash as fixed for that course. If they want to negotiate, I inform Shri Vijay Patil about the same. After some negotiation done by me, if an amount acceptable to both parties is reached, then it is finalized. But the final call is taken by Shri Vijay Patil only. Some students who come through some reference may directly approach him for admissions. In all cases Shri Vijay Patil is the final authority on how much cash is to be taken from any student in any course.
Q.29 Please state how and where is the cash received from capitation fees maintained by you? & 1304/Mum/2021 A.Ys.2016-17 & 2015-16 D. Y. Patil Sports Academy Ans. The capitation fee in cash is received by me and is usually maintained in Room no. 702 on the 7th floor in the P.G. Hostel premises situated in the D.Y. Patil campus, Nerul. The cash received by other persons like D.D.Kolte, Pratap Patil etc are maintained by them. The cash of Rs. 5,10,76,500/- has been received during a period of last two years. Whenever the management asks for the cash, it is taken out and sent to them. Also, payments in cash from this cash receipt are made to various persons as per directions received from Shri Vijay Patil, who is the President of D.Y. Patil University. Q.30 In case where cash is not readily available with the parents/guardians of the students, how do you book the seats in their name? Ans. In some cases, the parents would give us a cheque of the equivalent amount which is held by us till the cash is received. We book the seats in return. The cheque is then either returned to them or destroyed."
We note that the Ld. CIT(A) at Paras 8.4.11 & 8.4.12 of his order, had examined Shri Unmesh Khanvilkar’s statement and thereafter observed that not only had this person subsequently retracted his statement, thereby weakening the probative value of this statement, but he further noted that Shri Unmesh Khanvilkar had only admitted to collection of capitation fees in cash by DY Patil University and there was no reference or mention of the assessee Trust in his statement. There is also no mention of payment of capitation fee being received in cheque through the assessee Trust. We, therefore, agree with the findings of the Ld. CIT(A) that this ITA Nos. 1295 & 1304/Mum/2021 A.Ys.2016-17 & 2015-16 D. Y. Patil Sports Academy statement could not have been relied upon by the AO to justify the impugned addition on the facts of the present case.
In light of the above, we now examine the four instances of donations received by the assessee trust which correlated with the admission of candidates in DY Patil University, based on which the AO had inferred foul play viz., these donations were in lieu of capitation fees for admissions. The AO in this regard also referred to the pre-printed formats of corpus donation letters which were signed by these donors and observed that, these letters showed that there was no discretion for the donors and that they were forced into giving donations towards the corpus. Referring to the foregoing, the AO concluded that the donations were in lieu of capitation fees. Having regard to our above findings that the statements of Shri Pratap Patil, Shri Tukaram Patil & Shri Unmesh Khanvilkar do not support the allegation of AO against the assessee trust and not relevant as such. According to us, the aforesaid analogy of the AO, which has been relied upon by the Ld. CIT-DR, is noted to be based purely on suspicion and is not backed by any incriminating material found in the course of search or any adverse statement recorded in the course of search or in the course of assessment. Merely because the wards of few of the donors to the assessee Trust are students of DY Patil University cannot lead to an irresistable conclusion that these corpus donations were given in lieu of capitation fees. Before us, the Revenue was unable to bring on record any incriminating evidence or & 1304/Mum/2021 A.Ys.2016-17 & 2015-16 D. Y. Patil Sports Academy adverse statement of either the employees of the assessee Trust or the trustees of the assessee Trust or these donors, in which any of them had affirmed the AO’s suspicion that these donations were in lieu of capitation fees. It is noted that, before the Ld. CIT(A), the assessee never denied the fact that few of their donors have their wards studying in the University. Instead, the assessee explained the rationale behind the same. We observe that the Ld. CIT(A) took note of the same and accordingly rejected the reasoning given by AO doubting the genuineness of corpus donations, by observing as under:
“8.4.9 …Hence, in my considered view, merely because name of a student studying in one of the institutions run by another trust of the group is written on one of the letters of donation out of several letters of donations found and seized during the course of search, it cannot be presumed that the same was in lieu of any capitation fee when there is no other evidence on record to substantiate this finding. The assessee in its detailed submission has said that there is no denying to the fact that few of the donors have their wards studying in the institutions run by Pd. Dr. D.Y. Patil University. In fact, the claim of the assessee is that this is precisely the reason how they came to know about the work done by the assessee trust in the field of sports and have decided to make donation to the assessee trust. In this regard, I find merit in the submission of the assessee that the amount of donations by these individuals are not uniform so as to form any opinion that the donations were made in lieu of any capitation fee for admissions in the Institutions run by Pd. Dr. D.Y. Patil University or any other trust of the group. In fact, as submitted by the assessee, I find that there is a variance in the amount of donation by two parents whose wards have ITA Nos. 1295 & 1304/Mum/2021 A.Ys.2016-17 & 2015-16 D. Y. Patil Sports Academy taken admission in same MBBS course in the year 2015. To be precise as noted in the assessment order itself, Mr. Bernard Francis Sirur has paid a donation of Rs.50,00,000/- whereas Mr. Anant Bambawale has paid donation of Rs.40,00,000/- and Mr. Vithoba Hanumant Patil has paid a donation of Rs.30,00,000/-. The wards of Mr. Bambawale and Mr. Patil have taken admission in MBBS course in same year that is 2015 whereas the ward of Mr. Sirur has taken admission in the MBBS course in the immediate previous year, that is 2014. Furthermore, it is not the case of the AO that any of the parents have accepted to have given donation to the trust in lieu of capitation fee for admission of their respective wards or have denied to have issued the letters of donations found during the course of search. In fact, the AO himself has noted in the assessment order that they have stated to have made the donations voluntarily but without any specific directions. The findings of the Ld. AO that the letter accompanying the donation is in the pre-printed forms, does not bring anything adverse on record as the assessee, who receive donations on regular basis, may be keeping such pre-printed forms to facilitate the donors. What is important is that the donors have not stated that they have not submitted these letters along with the donations. In fact, their statements that the donations were given without any specific direction could not be considered for taking any adverse view as to the treatment of such donations towards corpus of the trust when the specific letters of donations, few of which have even been found and seized during the course of search also, have not been denied by them and it is also not the case of the A.O. that those letters are forged or ingenuine. In fact, on perusal of the seized documents identified as A- 27, it is evident that many such donation receipts issued by different individuals were found and seized during the course of search. The & 1304/Mum/2021 A.Ys.2016-17 & 2015-16 D. Y. Patil Sports Academy assessee has also listed them in its aforesaid submissions dated 15.03.2021 filed in response to the statements recorded during the course of assessment proceedings. On perusal of the same, it is found that there are no adverse findings in the assessment order in respect of most of those donations. It is also evident that there are no evidences found during the course of search or post search investigations or even during the course of assessment proceedings to even raise a doubt about most of the donations, receipts of which were found and seized during the course of search.
It is noted that the Ld. CIT, DR was unable to controvert the above findings of the Ld. CIT(A), nor was he able to bring on record any contrary material to disprove the same.
Our attention thereafter was invited to Paras 8.4.13 to 8.4.19 of the Ld. CIT(A)’s order wherein the Ld. CIT(A) had also examined the statements of each of the donors, who according to the AO, had given donations in lieu of capitation fees. It is noted that the Ld. CIT(A) had not found anything adverse in the statements of the donors in as much as none of them had admitted to paying capitation fees for admissions of their wards in the guise of donations to the assessee. The relevant findings of the Ld. CIT(A) were as under:
“8.4.13 The AO in para 10.3 of the assessment order has referred to the statements recorded u/s 131(1) of Miss Hina K. Chandran, Mr. Pratul N. Dalal and Mr. Supreet Singh. However, it is not the case of the AO that any of them have stated to have made the payment of donation in lieu of any capitation fee. As mentioned previously, the & 1304/Mum/2021 A.Ys.2016-17 & 2015-16 D. Y. Patil Sports Academy AO has forwarded copies of eight statements recorded during the course of assessment proceedings.
8.4.14. On perusal of the said statements, it is found that Mr. Anand Kumar Gadodia, Dr. Anand Arvind Pradhan and Mr. Niranjan Kumar Basak have stated to have not given any donation to the assessee trust. They in fact have given donation to another trust of the group naming Ramrao Adik Educational Society. In any case, in their respective statements, they have confirmed to have given the donation to the said trust and there is nothing in these statements to form any opinion that the donations were made in lieu of any capitation fee for any admission.
8.4.15. Ms. Sheela Aravindakshan, Mr. Sukhpreet Bakhshish Singh, Mr. Pratul N. Dalal and Mrs. Hina K. Chandran in their respective statements, have accepted to have paid donations to the assessee trust. Ms. Sheela Aravindakshan has paid Rs. 15 lakhs on 13th April, 2015 and Rs.5 lakhs on 2nd May, 2015. In her statement, she has categorically stated that the donation was not linked with any admission. She has stated to have given the donation for no specific purpose or direction and that it was a general donation. However, the donation paid by her pertains to assessment year 2016-17 and the same does not form part of the corpus donation received by the assessee during assessment year 2015-16 and as such the only thing which is material as an evidence for the year under reference is that the donation was given voluntarily and the same is not in lieu of any capitation fee paid for any admission.
8.4.16 Similarly, Mr. Sukhpreet Bakhshish Singh has given a donation of Rs.50 lakhs to the assessee trust which also pertains to & 1304/Mum/2021 A.Ys.2016-17 & 2015-16 D. Y. Patil Sports Academy assessment year 2016-17. In his statement Mr. Singh has also categorically stated that he has made this donation to the assessee trust for the betterment of football in our country and he has also stated that the donation was not given on the occasion of admission of any of his relatives and that it was given for the upliftment of sports activity. His donation also does not form part of corpus donation of the assessee trust for the year under reference. It was also claimed that the donation was actually not received as his cheque was cleared.
8.4.17. Mr. Pratul N. Dalal has given a donation of Rs.5.00 lakhs to the assessee trust during the year under reference. In his statement, Shri Dalal has stated that his daughter has graduated from M/s D.Y. Patil Dental College, Navi Mumbai and while approaching them for MDS admission they requested us for a donation for the D.Y. Patil Sports Academy. However, she did not say that the donation was in lieu of any capitation fee for the admission. In fact, she has further stated that in view of the fact that her daughter was actively participating in the cricket tournaments organized by the college, so as a support to D.Y. Patil Sports Academy he has paid Rs.5.00 lakhs as donation to the assessee trust. Although, he has stated that there was no specific direction for the donation but he has accepted to have signed the form as given by the trust which says that the donation was towards the corpus of the trust and therefore, he has not denied to have signed and issued the letter stating that the donation is towards the corpus of the trust and as such, in my considered view, no adverse view could be taken as to the donation having been taken as part of the corpus donation.
8.4.18. Ms. Hina K. Chandran has given a donation of Rs.32 lakhs to the assessee trust during the year under reference. She has also & 1304/Mum/2021 A.Ys.2016-17 & 2015-16 D. Y. Patil Sports Academy confirmed to have given this donation. She has categorically stated that the donation was not linked with any admission and that her father-in-law used to pay donations to cancer, etc. related charitable institutions, so she paid this amount to one Sports Academy for promotion of sports. Although, she has also stated to have given the donation without any specific direction but she has not denied to have issued the letter that the donation was towards the corpus of the trust and hence, no adverse view could be taken as to the donation being taken as corpus donation specially when the donation is found to be given in good faith and voluntarily. 8.4.19. It is also evident that the amount of donation by these individuals is not uniform so as to have any presumption that these are in lieu of any capitation fee. Moreover, the assessee contended that Mr. Supreet Singh, who has paid Rs.50,00,000/- as donation, does not even have any ward taken admission in any course in any of the institutions run by Pd. Dr. D.Y. Patil University.
At the time of hearing, the Ld. CIT, DR was unable to rebut the above findings of the Ld. CIT(A) or bring any such statement/s of the donors on record wherein they had admitted to giving donations in lieu of capitation fees.
16. As far as the statement of Shri Ajay Rai is concerned, it was brought to our notice that his statement pertains to the sole donation given by him to the assessee Trust in October 2012, and on this count alone, we agree with the Ld. CIT(A) that, the statement of Shri Rai does not have any bearing on the genuineness of the corpus donations & 1304/Mum/2021 A.Ys.2016-17 & 2015-16 D. Y. Patil Sports Academy received by the assessee Trust during the relevant A.Y. 2015-16 and has therefore been rightly ignored.
17. On overall conspectus of facts and circumstances, we find that there was no material or evidence unearthed in the course of search based on which the corpus donations received by the assessee Trust could be said to be not genuine. It is noted that neither have any of the donors nor have any of the trustees of the assessee Trust, anywhere admitted that these donations were given in lieu of capitation fees. As noted earlier, none of the employees of DY Patil University, who were examined on oath u/s 132(4) of the Act, have averred that the assessee trust was being used as a conduit to receive capitation fees collected by the University in the guise of donations. It is also not in dispute that the students of DY Patil University utilize the sporting facilities of the assessee Trust which is a renowned organization in field of sports and runs a Sports Stadium and ancillary facilities. Hence, in these circumstances, only because some of the parents of these students made donations to the assessee Trust, the genuineness of the donations cannot be doubted. We note that all the corpus donations were received through accounting channel and the identity of the donors are not in dispute. The assessee has also produced the relevant letters signed by the donors wherein it is mentioned that these were given with specific directions to form part of the corpus of the assessee Trust. It is also not the case of the Revenue that these corpus donations have been used for any other purposes other than the & 1304/Mum/2021 A.Ys.2016-17 & 2015-16 D. Y. Patil Sports Academy objects of the Trust. We therefore do not find any infirmity in the order of the Ld. CIT(A) holding the corpus donations to be genuine and therefore deleting the addition of Rs.12.37 crores made u/s 68 of the Act. Accordingly Ground No. 1 of the Revenue stands dismissed. 18. Ground no. 2 is against the order of the Ld. CIT(A) holding the action of the AO rejecting the books of accounts of the assessee to be untenable. Briefly stated, since the AO had held the corpus donations of Rs.12.37 crores to be non-genuine, he was not satisfied about the correctness or the completeness of the books of accounts of the assessee. The AO took note of the assessee’s plea that, it was maintaining the books of accounts as per law and is regularly audited by the auditors, but did not accept the same. Invoking Section 145(3) of the Act, the AO accordingly rejected the books of accounts and thereby assessed the assessee in the status of an AOP. Aggrieved, the assessee preferred an appeal before the Ld. CIT(A) who found that the AO had erred in rejecting the books of account without satisfying the requirements of law as set out in Section 145(3) of the Act. According to him, the AO could have rejected the books only if he was not satisfied about the correctness or completeness of the accounts of the assessee or where it is found that the method of accounting provided in sub-section (1) or accounting standards as notified under sub- section (2), have not been regularly followed by the assessee. The Ld. CIT(A) noted that the AO had not pointed out any defect or any irregularity in the books of accounts but had merely made sweeping ITA Nos. 1295 & 1304/Mum/2021 A.Ys.2016-17 & 2015-16 D. Y. Patil Sports Academy observations that the books of accounts are not in accordance with the general accounting principles. The Ld. CIT(A) therefore did not countenance this action of the AO. Being aggrieved, the Revenue is now in appeal before us.
We have heard both the parties. It is noted that the action of the AO in rejecting the books of accounts was a consequence of his findings holding the corpus donations to be not genuine. Since we have already upheld the genuineness of the corpus donations and the order of Ld. CIT(A), deleting the addition made u/s 68 of the Act, the premise on which the AO sought to reject the books of accounts stands vacated. Apart from the foregoing, we note that, the AO had otherwise not pointed out any defect in the books of accounts, accounting entries, etc. which led him to invoke Section 145(3) of the Act. Having regard to the foregoing facts, and our findings given while deciding Ground No. 1, we are unable to find any fault in the order of the Ld. CIT(A) holding the action of the AO rejecting the books of accounts to be untenable. This ground of appeal
therefore also stands dismissed.
20. Ground no. 3 of the Revenue is against the order of the Ld. CIT(A) allowing the benefit of Section 11 of the Act to the assessee, which was denied by the AO. It is noted that the action of the AO denying the exemption u/s 11 of the Act was a consequence of his findings that the corpus donations received by the assessee Trust was not genuine. Before the AO, the assessee had explained it is a & 1304/Mum/2021 A.Ys.2016-17 & 2015-16 D. Y. Patil Sports Academy charitable trust which was incorporated with the main object of promoting education in the field of sports and promotion of fitness. It was brought to the notice of the AO that the assessee was conducting various sports related courses along with the details of its student capacity for A.Y. 2012-13 to A.Y. 2017-18 which clearly showed that it was applying its income towards the objects of the Trust. The assessee had further explained that the Trust had been enjoying registration u/s 12A of the Act and all the income has been fully accounted for in the books of accounts and the same have been applied only towards the objects of the trust. However, the AO did not accept the reply of the assessee and according to him the assessee trust was not being run with the objective of charity. According to the AO, the assessee trust did not satisfy the criteria of “charitable purpose” as envisaged under section 2(15) of the Act. Therefore, he denied the benefit of exemption granted u/s 11 of the Act to the assessee for A.Y. 2015-16. Aggrieved, the assessee preferred an appeal before the Ld. CIT(A) who overturned the decision of the AO and allowed the exemption u/s 11 of the Act by holding as under: - “10.3. DECISION 10.3.1. I have considered the facts of the case, the findings of the Id. AO and the submissions of the assessee. In the assessment order, the AO has observed that the appellant has received donations from various persons in lieu of admissions taken by students in one of the groups concerns namely, Pd. DY Patil University. He has therefore observed that the activity of the appellant is not as per its objects, & 1304/Mum/2021 A.Ys.2016-17 & 2015-16 D. Y. Patil Sports Academy larger Public policy and not in accordance with its objective of charity as per section 2(15) of the Act. Accordingly, he has denied exemption u/s 11 to the appellant and held that the appellant would be treated as an AOP for tax purposes. The findings of the Ld. AO as to the donations received by the trust no longer remains relevant in view of the detailed findings in respect of Ground No.4 above.
10.3.2. The assessee submitted that it is a registered public charitable trust incorporated with the main object to promote, motivate and develop sports, health and fitness awareness, to impart coaching and training in various sports, conduct sports competitions, arrange tournaments and impart education related to sports. It was further submitted that appellant has established the DY Patil Sports Stadium which today ranks 9th largest cricket ground in India. The stadium and other ancillary facilities are available for use to general public. Even the students of DY Patil Group of college make use of the various facilities that the Trust has to offer like gymnasium, swimming pool, badminton court, football / cricket court etc. Further, the appellant is also proactive in imparting coaching, training of various sports, imparting education relating to sports activities and fitness to public at large. On the basis of the same, the Appellant has been granted registration u/s 12A of the Act by Commissioner of Income Tax which confirms that department is also satisfied that the objects and activities of the Appellant Trust are charitable in nature.
10.3.3. The assessee further submitted that the evidences and statements referred to in the assessment order are relating to Pd. DY Patil University and not the appellant. There are no corroborative evidences with the department to show that the alleged evidences so found are relating to the appellant. Moreover, there are no complaints & 1304/Mum/2021 A.Ys.2016-17 & 2015-16 D. Y. Patil Sports Academy by any students/parents or outside agencies about any charging of capitation fees by the appellant w.r.t violation of Maharashtra Educational Institutions (Prohibition of Capitation Fee) Act, 1987. Further, there is no allegation in the assessment order that any fees are received in cash outside the books of account. Undisputedly, all the donations received are recorded in the books of account of the appellant.
10.3.4. it was also submitted that the benefits of s. 11 of the Act can be denied only when there has been violation of the provisions of s. 13 of the Act and certificate u/s 12A/12AA is withdrawn which is not the fact in the instant case. Thus, without any tangible evidence as to existence of such collection and its disposal, the assessing officer-on the basis of assumptions, presumptions and surmises, cannot deny exemption u/s 11 of the Act.
10.3.5. It was further submitted that even presuming without admitting that the alleged corpus donations are capitation fees, still that does not affect the nature of the activities carried on by the Trust ie. the Trust is still carrying out charitable activities to public at large which is in line with its objects and hence still a charitable purpose u/s 2(15) of the Act. Thus, where the conditions laid in section 12 and 13 of the Act for denial of exemption u/s 11 are not fulfilled, the assessing officer cannot deny exemption to the Appellant. In support of its contention, the appellant placed reliance on multiple judicial pronouncements. {It was also submitted that in the entire assessment order, the assessing officer has only disputed the receipts in the nature of corpus donations being received in lieu of capitation fees against admission of students in Pd. DY Patil University. The assessing & 1304/Mum/2021 A.Ys.2016-17 & 2015-16 D. Y. Patil Sports Academy officer has nowhere doubted the application of funds for objects of the trust.
10.3.6. Hon'ble Supreme Court in the case of ACIT vs. Surat Art Silk Cloth Manufacturers Association reported in 121 TR 1 (SC) held that the primary or dominant purpose of the trust or institution has to be examined to determine whether the said trust /institution is involved in carrying out any activity for the profit and (ii) if the “object” of the trust or institution is to carry out object of general public utility and this is the primary or dominant purpose and not carrying on any activity for profit, the same would satisfy the requirements of section 2(15) of the Act. Further, the Hon’ble High Court of Delhi in the case of M/s GSI India vs. DIT, Delhi reported in 360 ITR 138 elaborately differentiate the business, trade activity from charitable activity under the residuary category “advancement of any other object of general public utility”.
10.3.7. Provisions of section 11 of the Act envisages utilisation of funds for charitable purposes in India. In order to claim exemption u/s 11 of the Act, what is important is application of funds for charitable activities and not the source of funds. Hence, contention of the assessee is that even presuming without admitting that the appellant has received corpus donations in lieu of admissions taken by students in other university, as long as the application of these funds are not doubted, the assessing officer cannot deny exemption u/s 11 of the Act. In this case, however, it is already found that there is no evidence to raise any doubt about the genuineness of the receipts of the trust. Hence, when there is absolutely no evidence to believe that e expenses of the trust are not as per the stated objectives and purpose, there remains no reason to deny the benefit of exemption to the trust. & 1304/Mum/2021 A.Ys.2016-17 & 2015-16 D. Y. Patil Sports Academy 10.3.8. There is no dispute about the fact that the assessee trust itself does not run any medical college or any such institution and therefore the question of accepting any capitation fee for admissions by the assessee trust does not arise. As noted previously, all the receipts and payments of the trust are duly recorded in the books of accounts and no discrepancies in respect of those were found by the Assessing Officer. There is no evidence brought on record found during the course of search in respect of any unaccounted receipt or expenditure of the assessee trust. The assessee has been issued a certificate U/s 12A/12AA which has not been withdrawn. There is no evidence on record that the receipts of the assessee have not been spent for the purpose and as per the object of the trust. Further, there is nothing on record to have even a presumption as to any misappropriation of the funds of the trust. Hence, there remains no reason for withdrawing exemptions U/s 11 of the Act. Therefore, considering the facts of the case and following the decisions relied upon by the assessee, it is held that once application of funds is towards charitable activities, and the registration granted to the Trust u/s 12A of the Act has not be cancelled, the exemption claimed u/s 11 cannot be denied, as there is no violation of the provisions of the Act. Ground no. 2 is accordingly allowed.”
Aggrieved the revenue is before us.
We have heard both the parties and perused the records. It is noted that, since the AO had held the donations received by the assessee Trust to be not genuine, he consequently concluded that the assessee Trust was not being run with the objective of charity and therefore denied the benefit of exemption u/s 11 of the Act. Having & 1304/Mum/2021 A.Ys.2016-17 & 2015-16 D. Y. Patil Sports Academy regard to our findings given while adjudicating Ground No. 1 of the appeal of the Revenue wherein we have upheld the genuineness of the donations received by the assessee Trust, this ground of the Revenue now has no merit. It is also not the case of the AO or the Ld. CIT, DR that the income/receipts of the assessee Trust were not spent for charitable purposes. No instance has been pointed out to us by the Ld. CIT, DR wherein the receipts/funds were diverted by the assessee Trust for the personal benefit of the trustees or was spent for any other purpose other than towards the objects of the Trust. We therefore see no reason to interfere with the above findings of the Ld. CIT(A). Accordingly, this ground of appeal
also stands dismissed.
23. Next ground of appeal of the Revenue is against the action of the Ld. CIT(A) allowing the assessee to carry forward the deficit for the impugned year, being the excess of expenditure over receipts, to be set-off against the excess income of subsequent years. It is noted that this claim of the assessee was allowed by the Ld. CIT(A) by relying on the judgment of the Hon’ble Bombay High Court in the case of Institute of Banking Personnel Selection (IBPS). Aggrieved by this action, the Revenue is in appeal before us, on the ground that the Revenue has challenged this decision before the Hon’ble Supreme Court. Therefore, in order to keep this issue alive, appeal has been preferred by the Revenue. At the outset, the Ld. AR of the assessee brought to our notice that the SLP preferred by the Revenue has been dismissed by the Hon’ble Supreme Court and even the review petition & 1304/Mum/2021 A.Ys.2016-17 & 2015-16 D. Y. Patil Sports Academy filed in RP No. 20745 of 2020 has since been dismissed by Hon’ble Supreme Court vide order dated January 11th, 2022. The Ld. CIT-DR was unable to bring anything contrary on record. We, therefore, do not see any merit in this ground of the Revenue and hence dismiss the same.
24. Coming to the appeal of the revenue in A.Y. 2016-17, the sole ground raised therein is as under: - “1. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) is justified in holding that the assessment completed in this case u/s 143(3) of the Act for the AY. 2016-17 is invalid without appreciating the fact that the AO has explicitly mentioned in the satisfaction note that why notice us/ 153C is not issued for the AY. 2016-17 in which he given the detail reasons for the same.”
25. It is noted that, the AO has framed the assessment for the relevant A.Y. 2016-17 u/s 143(3) of the Act vide order dated 28.12.2018. Before the Ld. CIT(A), the assessee has raised a preliminary legal objection that the AO had not issued notice u/s 153C of the Act prior to framing the assessment for the A.Y. 2016-17 and therefore according to the assessee, the impugned order framed u/s 143(3) of the Act stood vitiated in law. The Ld. CIT(A) upheld this legal contention of the assessee and quashed the assessment order by holding as under: - & 1304/Mum/2021 A.Ys.2016-17 & 2015-16 D. Y. Patil Sports Academy “6.2.27. In this case also, there is no dispute about the fact that the AO has issued notices under section 153C of the Act only for five assessment years and not for six assessment years including AY.2016-
17. Whereas, in the case of the assessee, in terms of the interpretation of 1st Proviso to Section 153C read with 2nd Proviso to Section 153A of the Act the assessment of AY 2016-17 had abated, since the assessment proceedings were pending on the date of recording of the satisfaction. It is settled position of law that once provisions of section 153C is triggered, it is mandatory for the AO to issue notice calling upon the assessee to file returns for the six assessment years prior to the year in which the search took place. It is also settled position of law that once proceedings under section 153C are initiated, then no parallel proceedings under Section 143(3) can be made. Thus, once the conditions as mentioned ‘the ‘said section’ are, satisfied, then the only route available with AO is to” make ‘assessment sunder ‘section 153C not under section 143(3) of the Act for any of the years falling under the six assessment years. Therefore, the assessee’s case for the present assessment year, AY 2016-17, was to be assessed u/s 153C read with Section 153A of the Act after recording a proper satisfaction for assumption of jurisdiction for the year under consideration and issue of notice under section 153C/153A of the Act. However, it is found that in this case the AO had neither recorded an 'satisfaction’ nor did he issue notice under section 153C/153A of the Act for this assessment year. Furthermore, he proceeded with completing the assessment u/s 143(3) of the Act, which has abated. The assessment order is, therefore, not sustainable. In the given facts of the case, I am construed to hold that the assessment completed in this case u/s 143(3) of the Act for AY 2016-17 is invalid and bad in law.”
ITA Nos. 1295 & 1304/Mum/2021 A.Ys.2016-17 & 2015-16 D. Y. Patil Sports Academy 26. Aggrieved, the Revenue is in appeal before us.
We have heard both the parties and perused the records. The Ld. AR brought to our notice that, the search in this case, took place on 27.07.2016 in the case of M/s. D.Y. Patil Group (Padamshree D.Y. Patil University and others). Admittedly, the assessee was not the ‘searched person’. It is noted that, the AO, after taking note of certain material found during the course of search which pertained to the assessee, recorded his satisfaction note qua the assessee to initiate proceedings u/s 153C of the Act only on 14.09.2018 i.e. AY. 2019-20. Accordingly, in terms of the first proviso to Section 153C of the Act, the date of search for the assessee was to be construed to be the date of receiving the books of account or the documents or assets seized by the AO of the assessee, i.e. 14.09.2018 (date of satisfaction note). Hence, in terms of Section 153C of the Act, the period of six (6) assessment years preceding the date of search, to be reckoned for initiation of proceedings under Section 153C of the Act was 14.09.2018. The AO was therefore duty bound to first issue notices u/s 153C of the Act for the six (6) assessment years preceding the year of search i.e. AY 2019-20, in the present case. The relevant AY 2016- 17 being the third (3rd) assessment year preceding the deemed date of search i.e. 14.09.2018, the AO was duty bound to first issue notice u/s 153C of the Act. It is not in dispute before us that, the AO has framed the assessment u/s 143(3) of the Act without issuing the notice u/s 153C of the Act which was condition precedent to usurp jurisdiction & 1304/Mum/2021 A.Ys.2016-17 & 2015-16 D. Y. Patil Sports Academy over the assessee to assess its income for AY 2016-17. Having regard to the foregoing, we find that the Ld. CIT(A) had rightly held that the non-issuance of notice u/s 153C of the Act vitiated the entire assessment proceedings for AY 2016-17 rendering the assessment order passed u/s 143(3) of the Act to be ab initio void. This view of ours finds support in the decision rendered by the Delhi Bench of this Tribunal in the case of Pavitra Realcon Pvt Ltd Vs ACIT (87 taxmann.com 142) wherein it was held as follows:
“15.3 Since the satisfaction was recorded on 27th July, 2012, therefore, deemed date of search in the case of other person for computing the period of six years is 27th July, 2012 and the six assessment years immediately preceding the assessment year relevant to previous year in which such search is conducted is assessment years 2006-07 to 2012-13. However, it is an admitted fact that no such notice u/s 153C was issued by the Assessing Officer in the above two cases for the impugned assessment years and the ld. DR also fairly admitted the same. It is a fact that the Assessing Officer mentioned in the body of the assessment order that the same has been passed u/s 153C/143(3). However, the Assessing Officer has not assumed jurisdiction u/s 153C as per the copies of order sheet entries filed during the course of hearing and the ld. DR also confirmed that no notice u/s 153C has been issued by the Assessing Officer in the above two cases. As per the requirement of the proceedings under Income Tax Act, the assessment proceedings has to be done as per Section 153C of the Act in case of the searched party. But the Assessing Officer choose to follow procedure u/s. 143(3) of the Act, yet while conducting the proceedings under the said Section chooses to use the & 1304/Mum/2021 A.Ys.2016-17 & 2015-16 D. Y. Patil Sports Academy material which was found during search with the third party without confronting the same to the present assessees. This is not permissible as per the provisions of the Income Tax Act, 1961. The contention of the Ld. DR that Principle of natural justice is a flexible concept is not permissible. The statute has to be strictly followed and the Revenue cannot ignore the procedure given under Section 143(2) or Section 153A/153C of the Act. If we admit the submissions made by the Ld. DR that the Assessing Officer has rightly issued notice u/s 143(2) dated 13/9/2012 then how the Assessing Officer has used the material which was found during the search in this particular Assessment Year 2011-12. Section 143(2) and Section 153C are not only governing the procedure to be followed by the Assessing Officer but there is an obligation upon the Assessing Officer to properly fulfill the provisions of the Income-tax Act. Section 143(2) notice is given when the returns are furnished u/s 139 or in response to notice under sub section 1 of Section 142 when the assessee has not stated the income properly. Section 153C begins with non obstante clause that notwithstanding anything contained in Section 139, Section 147, Section 148, Section 149, Section 151 & Section 153, the Assessing Officer will issue notice as per provisions of 153A. The intention of the parliament for separate Sections for issuing notice u/s 143(2) and Section 153A is specifically different and falls in particular circumstances mentioned in those particular Sections. It cannot be interlocated or inter related. Clearly, here the Assessing Officer was prima facie of the opinion that there was a search in the premises of BPTP Group. But instead of the searched material whether belong to the assessee or not which is in doubt cannot be simply taken in proceedings u/s 143(2) by the Assessing Officer. The Assessing Officer cannot take the benefit of both the Sections. It has to be specifically mentioned in the & 1304/Mum/2021 A.Ys.2016-17 & 2015-16 D. Y. Patil Sports Academy assessment order why he is invoking that particular Section because each Section has its own procedure and if there is a procedure which has to be followed the same cannot be ignored by the Assessing Officer. All the Sections to Income tax Act has given its own formats and whenever necessary they have given specific Sections in that particular Section and why the other Section has to be taken in cognizance while interpreting that particular Section. Thus, the legal ground of the assessee that Assessing Officer as well as the CIT(A) has not carried out proper proceedings against the assessee by invoking Section 143(2) in case of Pavitra and Dedicate sustains to the test of legal scrutiny. The Ld. DR relied upon the various Hon'ble Supreme Court and Hon'ble High Court judgments. The legal principle in all these judgments does not give the right to the Revenue to over look the Sections or misinterpret the Section as per the convenience of the Department. In-fact, all the Hon'ble Supreme Court as well as the Hon'ble High Court judgments have rather reiterated each and every factual aspect of each case and after that have come to the conclusion whether that particular Section in the particular case has been properly followed or not. The decision is not only based on the legal principle but how the legal principle has to be applied to the factual aspect of each case has been taken care of by the Apex Court and the Hon'ble High Court.
We find the year for which the impugned assessment order has been passed u/s 143(3) is for assessment year 2011-12. This year falls within the period of six years when counted from the date of recording of satisfaction note u/s 153/153C of the I.T. Act which is deemed date of search. The Act has been amended recently by the Finance Act, 2017 with prospective effect i.e. from assessment year 2018-19. Thus, & 1304/Mum/2021 A.Ys.2016-17 & 2015-16 D. Y. Patil Sports Academy the period is same now only for the searched parties as well as the other person as per the amended provisions of the said section. In view of the above, we hold that the assessment completed u/s 143(3) is invalid.
So far as the argument of the ld. DR that although no notice u/s 153C has been issued but the assessment has been completed u/s 153C/143(3) and therefore, the error is curable u/s 292B is concerned, the same in our opinion cannot be read to confer the jurisdiction on the Assessing Officer where none exists. The said section, in our opinion, only protects return of income, assessment, notice, summons or other proceedings from any mistake in such return of income, assessment notices, summons or other proceedings provided the same are in-substance and in-effect are in conformity with the intent or purposes of the Act, i.e., 292B cannot save an order not passed in accordance with the provisions of the Act. We have also gone through the order-sheet entries, copies of which were filed during the course of hearing and find that no notice u/s 153C has been issued for the period under consideration. Since the assessment order has not been passed in conformity with the provisions of the law, the same is liable to be quashed since such assessment is palpably and patently illegal.” 28. Similar view is noted to have been rendered by the Delhi, B- Bench of this Tribunal in the case of BNB Investment & Properties Ltd. v. Dy. CIT (68 ITR 567 (Trib)). In the decided case, Krissh Group was searched on 09.11.2011. The impounded documents belonging to the assessee was received by the AO on 29.08.2013 and the satisfaction note was recorded on 03.10.2013. Therefore, in terms of first proviso to Section 153C of the Act, the date of search was ITA Nos. 1295 & 1304/Mum/2021 A.Ys.2016-17 & 2015-16 D. Y. Patil Sports Academy construed to be 29.08.2013 and therefore six preceding AYs to the date of search was AYs 2008-09 to 2013-14. The AO, however, framed the assessment for AY 2012-13 u/s 143(3) of the Act without issuing notice u/s 153C of the Act. This action of the AO was held to be invalid and the assessment order was quashed by this Tribunal, by holding as under:
8. It is not in dispute that search was conducted on Krrish Group of cases on 09.11.2011. The impounded documents have been received by the A.O. on 29.08.2013. The satisfaction under section 153C have been recorded on 03.10.2013. The A.O. passed the assessment order under section 153B(1)(b) of the I.T. Act, considering the assessment year under appeal i.e., A.Y. 2012-2013 to be the year of search. However, the First Proviso to Section 153C of the I.T. Act provides that the 06 assessment years for which assessments or re-assessments could be made under section 153C of the I.T. Act, would also have to be construed with reference to the date of handing-over of the assets or documents to the A.O. of the assessee. Therefore, the 06 assessment years under section 153C of I.T. Act in the case of assessee would be A.Y. 2008-2009 to 2013-2014. The A.O, therefore, shall have to pass the assessment order under section 153C of the I.T. Act. However, A.O. has not issued any notice under section 153C of the I.T. Act before initiating the proceedings against the assessee which is also admitted by the A.O. in reply to the assessee under RTI Act. The Amendment in Section 153C of the I.T. Act by the Finance Act, 2017, w.e.f. 01.04.2017 to the effect that block period for the person in respect of whom the search was conducted as well as the other person" would be the same six assessment year immediately & 1304/Mum/2021 A.Ys.2016-17 & 2015-16 D. Y. Patil Sports Academy preceding the year of search is prospective in nature. The issue have been dealt in detail by the Hon'ble jurisdictional Delhi High Court in the case of Pr. CIT vs. Sarwar Agency P. Ltd., (supra) and by ITAT, Delhi, B-Bench, in the case of Empire Casting Pvt. Ltd., New Delhi vs. ACIT, C.C.2, New Delhi and Pavitra Realcon Pvt. Ltd., New Delhi vs. ACIT, C.C.32, New Delhi (supra). The A.O, therefore, should have framed the assessment under section 153C of the I.T. Act in the case of the assessee and at the time of initiating the proceeding against the assessee, should have issued notice under section 153C of the I.T. Act which have not been done in this case. The issue of notice under section 153C is mandatory and a condition precedent for taking action against the assessee under section 153C of the I.T. Act. The assessment order, therefore, vitiate, void, illegal and bad in law and cannot be sustained. The contention of the Ld. D.R. have already taken care in the above judgments.
Considering the totality of the facts and circumstances of the case, we set aside the orders of the authorities below and quash the same and allow the additional grounds of appeal
s. Resultantly, all additions stands deleted. Since the assessment order is set aside on legal grounds, therefore, there is no need to decide the addition on merit which has been left with academic discussion only.”
29. We may also gainfully refer to the decision of the Delhi Bench of this Tribunal in the case of Bina Fashions N Foods (P.) Ltd. v. Dy. CIT (77 ITR (Trib.) 68) rendered on similar facts and circumstances, wherein also the assessment order was quashed by this Tribunal, by holding as under: - & 1304/Mum/2021 A.Ys.2016-17 & 2015-16 D. Y. Patil Sports Academy “4. We have heard the Learned Representatives of both the parties. Learned Counsel for the Assessee submitted that A.O. should have passed the assessment order under section 153C since satisfaction note was prepared by the A.O. on 29.01.2014 which became the substitute date of search under section 153C and A.Y. 2012-2013 under appeal fell within six preceding assessment years i.e., from A.Y. 2008-2009 to 2013-2014 for the purpose of assessment under section 153A of the I.T. Act, 1961. Thus, the assessment framed under section 143(3) is not valid and should be annulled…..
…..
5. On the other hand, Ld. D.R. relied upon the Orders of the authorities below and submitted that A.O. has correctly passed the order under section 143(3) of the I.T. Act, 1961.
…..
6.1. Considering the facts of the case in the light of above decisions, it is clear that the impounded documents have been received by A.O. on 29.01.2014 when satisfaction under section 153C have been recorded. The First Proviso to Section 153C of the I.T. Act provides that six assessment years in which assessment or re-assessments could be made under section 153C of the I.T. Act would also have to be considered with reference to the date of handing over of the assets or documents to the A.O. of the assessee. Therefore, the six assessment years under section 153C of the I.T. Act in the case of assessee would be A.Ys. 2008- 2009 to 2013-2014. The A.O, therefore, shall have to pass the assessment order under section 153C of the I.T. Act. Further, the A.O. has not issued any notice under section 153C of the I.T. Act, therefore, the issue is covered by the above decision in favour of the assessee. The & 1304/Mum/2021 A.Ys.2016-17 & 2015-16 D. Y. Patil Sports Academy A.O. in the satisfaction note initiated the proceedings under section 153C only for A.Ys. 2006-2007 to 2011-2012 instead of A.Ys. 2008- 2009 to 2013-2014. In view of the above, we are of the view that assessment order is illegal and bad in law and cannot be sustained in Law.”
Respectfully following the above decisions (supra), we do not see any reason to interfere with the order of the Ld. CIT(A). Accordingly, this ground of the Revenue is dismissed.
31. In result, both the appeals filed by the revenue are dismissed.
Order pronounced in the open court on 28/09/2022.